One cozy casino deal

A little-known hamlet of mobile homes tucked away in Lake County seems an unlikely location for a bustling new casino, one piece in a massive gambling expansion approved by Illinois lawmakers.

Park City has just about 7,500 residents, virtually no business district and a bare-bones government.

The way the deal unfolded to bring a casino to this community says much about how winners and losers are picked as Illinois looks to fill its strapped bank accounts with gambling cash.

At the center are three characters: a state senator who sponsored the legislation, a developer who is one of the senator's regular campaign donors and a small-town mayor who jumped at the opportunity.

The project's biggest boosters are eager to make the casino a reality, but Gov. Pat Quinn has indicated he may not sign the gambling legislation out of concern it is too expansive and could undermine state oversight of the industry.

Adding to the debate are questions about Park City's exclusive agreement with developer Alan Ludwig that was quietly inked more than a year before state lawmakers passed the gambling bill May 31. Ludwig saw his previous bid to build a casino scuttled by gambling regulators due to controversial business ties.

State Sen. Terry Link, D-Waukegan, who sponsored the legislation, said he didn't write Park City into the legislation to help his friend and supporter. He said he didn't even know Ludwig has had a deal with the town since early 2010.

"I've known the guy for over 20 years. I'm not denying that. But I'm not going to jail for anybody. I'm not going to put a fix in for anybody. No," Link said in an interview.

The prospect of a gambling hall in Park City had its roots in years of frustration for Link and Ludwig, who since the 1990s have shared a desire to bring a casino to Lake County.

Ludwig could never persuade state regulators to award him Illinois' only available casino license, and Link's efforts to expand gambling repeatedly failed in the Legislature. Things got worse in April 2009 when an anti-casino mayor was elected in Waukegan, long considered the prime location for new gambling.

Suddenly, both men needed to find a willing host in order to continue their quest.

Link looked to neighboring Park City, which has quick access to major highways, and approached Mayor Steve Pannell. Soon after, Pannell was approached by Ludwig. Town leaders were quick to warm to the idea.

"We're all receptive. All the aldermen are receptive, 100 percent," Pannell said in an interview while standing on the front porch of his mobile home.

Pannell said he and the city's lawyer had a private meeting at City Hall with Ludwig and the businessman's attorney, and they hashed out an agreement making Ludwig the town's chosen casino developer. Pannell declined to discuss details but said issues like impact studies and revenue projections will come later.

Ludwig said many other specifics would be decided at a later time, when he partners with a potential casino operator. The focus of the meeting with Pannell was to make a deal so "if there was ever another expansion, we'd have an opportunity."

One provision stands out in the short agreement — Ludwig's company would receive half of Park City's share of gambling tax revenue for the casino's first 20 years of operation. Based on figures from other Illinois casino towns, that provision could be worth millions of dollars a year.

In February 2010, the City Council approved an ordinance naming Ludwig's firm, Park City Gaming, as its exclusive partner. It was roughly a year before Link introduced the gambling expansion bill that passed last spring.

"We figured if the legislation passed, we would be ready," Pannell said. If Quinn signs the bill, "we'll be ready to steamroll."

Pannell said the city did not even consider entertaining other bidders because "nobody else approached me."

While the developer said he went to the town at Link's urging, the lawmaker drew a distinction. Link said Ludwig approached him after he first put Park City into a failed gambling proposal in the spring of 2009.

"Here's what probably happened. After Park City was in the bill, he knew about that, and I told him, my exact words were probably, 'Don't talk to me, talk to Park City because I have nothing to do with this,'" Link said. "I have told him numerous times not to talk to me about this because I vote on this."

Link said his gambling efforts have always been focused on bringing economic development to Lake County and never about helping a particular developer. While he and Ludwig have long had a parallel interest, Link said it wouldn't be appropriate for him to broker a deal between any municipality and a private business.

Link insisted he was unaware of Ludwig's year-old agreement with Park City.

"I don't want to know because I don't want to be in that position," Link said. "Ignorance is bliss sometimes."

Since 1996, Ludwig and his business enterprises have donated more than $20,000 to Link's campaign fund and earlier this year donated $5,000 to Link's wife's unsuccessful campaign for Waukegan City Council.

The state's top gambling regulator said he'd like to see towns and firms bid for a casino license rather than have legislation dictate a specific city as a casino location.

"One of the first questions I asked publicly is, how were these places picked?" said Aaron Jaffe, chairman of the Illinois Gaming Board. "What it appears to me is what the Legislature's tried to do is to sidestep the Gaming Board and take us out of the selection business and put it into the hands of the Legislature."

If the bill becomes law, Ludwig will still have to get approval from the Gaming Board for a Park City casino.

Ludwig has long worked for a casino license but has always come up short. In 2008 the Gaming Board rejected his group's bid for one in Waukegan, citing in part the involvement of William Cellini, a legendary Springfield political insider indicted on corruption charges in the investigation of former Gov. Rod Blagojevich.

Ludwig insists he's the only person involved this time, a point he said he made to Park City officials.

"They knew me, knew who I was and were comfortable with me and were concerned about anybody else," Ludwig said. "It's just me."

While Ludwig has had to answer questions about his past casino efforts, the potential site of a Park City casino has its own connection to Illinois' gambling history.

The undeveloped tract of land being eyed for the casino is owned by the Zeman family, which also owns one of the three mobile home parks where most of Park City's population resides. The family's deceased patriarch, Edwin "Bud" Zeman, was an investor in the failed Emerald casino bid in Rosemont.

After years of legal wrangling, the Emerald bid was rejected by the state amid allegations that other investors had ties to organized crime figures.

Ludwig said he is considering "several sites, three or four" in Park City for the casino and not just the Zeman property.

Zeman's son, Edward, said he had a short conversation with the mayor about a casino site.

"I talked to him briefly. He said they want it to go there," Zeman said.

While Ludwig will still have to negotiate to buy the site, his deal with Park City puts him in a unique position to finally achieve his casino dream.

"All I can tell you is if (somebody else) put 20 years in and put in the effort, then they'd be entitled," Ludwig said. "I'm not a Johnny-come-lately. I've put my time and money up."